February 18, 2004

Dear Sir,

Talk about speaking out of both sides of your mouth at once. Back last October, some of the rent paying residents of Prospect were apparently given notice that within several months they would be required to move, as building was going to commence shortly on 34 new units within the Prospect area. The rest of the owner residents were not informed of this. In the mean time the owner residents were talking to their government representative, Mr. Glen Blakeney, about the problem of more housing in their already crowded area. He informed them quite candidly that he would solve the problem and make sure that other solutions would be found.

He also asked them to keep everything under wraps for the time being i.e. no letter writing, no public utterances, no going to consult with anyone else ? he would be their sole help. He did not wish them to speak to the Housing Minister themselves, it would have to be done through him. If they did any of these things then he told them he would not be able to assist them at all! This from their elected representative!

When the Planning Applications list came out, in the newspapers on Friday, 13 February, citing the Alexandra Road and Mary Victoria Road with plans for 34 new units, the residents were absolutely dumbstruck. This flew in the face of everything they had been told. No one puts in a final planning application unless the intent is to quickly proceed with it. Now the good people of Prospect have really mobilised themselves in the face of this treatment and demand answers and are quite prepared to do whatever it takes to have government listen to them.

There are plenty of lots of land owned by government that could accommodate condominiums and house many of the people who are desperately searching for accommodation. A 'rent to buy' policy could easily be put in place. The infrastructure would also be put in place at the same time- parking, good street lighting, garbage disposal collection points, playgrounds for children etc.

So why make a ghetto out of a good working class estate and increase the possibility of crime and endangerment of the families living in that area? Especially since the maintenance in this area and Cedar Park as well as Frog Lane is so appalling and has not been addressed in years. Street lights that are out. Roads that are dangerously eroded. Inadequate garbage collection units etc.

The reason for having a government at all is to look after the social aspects of our community with sound policies ? one of which has housing at the top of the list. Right now this Government has absolutely no regard for the citizens of Bermuda when it comes to having a sound housing plan. Hopefully the meeting to be held on Thursday night will bring some understanding of the plight of this estate.

February 17, 2004

Dear Sir,

Concerning the balloons smuggled into the island and used illegally by a well meaning visitor for Valentine's Day... I, for one, would like to thank the Departments of Immigration and Customs for their efficiency and diligence. I was wondering if we might see those same qualities displayed when we threatened balloon-tying locals next apply for a passport without being misled three to four times by three to four different people, none of whom have ever heard of each other.

Or when we next attempt to complete the 50 yard crawl through the airport's arrival hall in less time that it takes to fly here in the first place... from England. So well done... and thanks for not missing out on the opportunity to embarrass yourselves yet again while bringing laughter and amusement to the faces of locals and visitors alike.

JASON SEMOS

Paget

February 18, 2004

Dear Sir,

I read with interest your front-page article quoting Craig Simmons' views on Bermuda's housing crisis (February 18). Apparently Mr. Simmons views the current housing crisis as an instance of "market failure", and claims (according to your reporter) that "market forces in housing were out of control in Bermuda". As an economist myself, I'm intrigued how "the market" is invariably blamed for failures which are inevitably attributable to Government regulation. First of all, "market forces" are not something mysterious and shadowy, operating in incomprehensible ways.

"The market" simply refers to a collection of individuals who are buying and selling a given product, at a given time. "The market" is ruled by the laws of supply and demand. If prices are rising, it means that demand for the product is growing faster than the supply of that product. It's clear that housing prices are rising in Bermuda. And it's clear that, as the population continues to grow over time, demand for housing must continue to grow. We can logically deduce from these facts that the supply of housing is not growing as quickly as the demand for housing.

We must ask: Why is the supply of housing not growing as quickly as demand for housing? At first glance, one might think that the supply of housing is limited by the small and finite amount of land available in Bermuda. Yet, the island of Manhattan and the city of Hong Kong have similar issues regarding small and finite amounts of land ? and their population densities are orders of magnitude higher than Bermuda's. So clearly the amount of land is not the limiting factor in Bermuda's housing "crisis".

Much more importantly, the supply of housing in Bermuda is limited by the fact that the government forcibly prevents anyone from building beyond a certain height. It's time to remove this restriction, and stop blaming "the market". A few high-rise condo/apartment buildings would be all that's needed to substantially relieve housing pressures, and bring prices and rents down. While some may view this suggestion with distaste, the only alternative, in the long-run, is drastic population control measures.

Bermuda could substantially restrict or even decrease the number of ex-pats ? but this would severely damage the economy. Housing prices would come down, to be sure, but this would be small comfort to the thousands of Bermudians consequently thrown out of work. In any case, this still would not solve the problem in the long-run.

So long as the population continues to grow, pressures on housing will grow. Does Bermuda want to do anything as drastic as impose a two-child maximum for every Bermudian family? If not, it's only a matter of time (whether ten, 30, or 50 years) until Bermuda will need to start building high-rises. According to your article, Mr. Simmons suggests that Bermuda start emulating Hong Kong's government subsidies on mortgage rates. I suggest Bermuda emulate Hong Kong in a different regard: start building skyscrapers.

ANOTHER ECONOMIST'S VIEW

Pembroke

February 14, 2004

Dear Sir,

I am writing in response to the column entitled "High Rents" in the February 13 . I think it is of vital importance that the Members of Parliament heed the Editor's words and do not try to bring rent control to Bermuda. Price controls invariably hurt those they are intended to help.

This is true whether these controls apply to bread, cars, petrol or homes. Take milk as an example. Imagine the Government declares that no store can charge more for milk than $1 per gallon. Two things would happen. First, milk would fly off the supermarket shelves as people buy more than they need. (Why not? With milk so cheap, it's no big deal if some of it goes bad.)

Second, the supply of milk would disappear, and fast. (Why would dairy farmers bother to produce milk just to sell it at a loss?) The result: a severe shortage of milk. What is true of milk is true of housing. If rent control were imposed, people would stay in homes larger than they need, and developers would stop building new ones. This is not just theory; it has been proven again and again, all over the world. I hope our MPs don't start thinking that Bermuda is immune to the laws of supply and demand.